RUSHB
Rush Enterprises, Inc.
$57.89
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 40.2% below fair value
You pay
$57.89
Bear
$70.38
Fair
$96.78
Bull
$122.33
Bear
$70.38
+21.6%
6% stage 1 growth, 11% discount
Fair
$96.78
+67.2%
9% stage 1 growth, 11% discount
Bull
$122.33
+111.3%
12% stage 1 growth, 11% discount
Adjust Assumptions
9.4%
11.0%
3.0%
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
13.2x
Market is pricing in (growth)
3.4%
vs 9.4% base
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $96.78 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions